Tax arrangements are perceived as a complex and risky business which many organisations avoid tackling despite the opportunities which bona fide, well structured tax planning can provide.

Wright Hassall's Tax Team provides advice in respect of:

Why are employee incentives a good option?

  • They help to recruiting new employees
  • They are particularly useful in retaining key employees, especially in businesses which cannot afford to reward with salary increases now
  • They motivate key employees and 'lock them in' to the business, which is significant in those sectors where there is keen competition for talent
  • Aligning owner and employee interests
  • They are cash cost efficient
  • A low risk Government backed arrangements 
  • Provide tax benefits for employers and employees

Questions you should be asking yourself as a business owner

  • Are your key people locked-in and motivated?
  • As business owners, would you give a share of ownership in exchange for enhanced overall value?

Which organisations do employee incentives help?

Potentially any but they are particularly attractive to:

  • Company limited by shares
  • Open-minded business owners
  • Key employees with no existing stake
  • Organisations with growth potential
  • Businesses where exit or listing a realistic aim
  • A desire to secure tax efficiencies
  • People are the business' key assets

Why is personal tax planning attractive?

  • Planning can help to mitigate Inheritance Tax  ("IHT")
  • The savings can be considerable as IHT is paid for all amounts above the nil rate band
  • The increase in property valuations have exposed many estates to IHT
  • They are reliefs that are available which can provide 100% relief from IHT including Business Property Relief (BPR) and Agricultural Property Relief ("APR")

Question you should be asking yourself in relation to personal tax planning

Are you aware of your potential IHT exposures and the steps you can take to mitigate them?

Who should be thinking about personal tax planning

Anyone! However, it is of particular interest if:

  • Your estate is worth £2m - £10m+
  • You own your own business
  • You have significant shareholdings/farming assets
  • You are considering (or have made) a material asset disposal
  • You want to pass a business/farm on to a family member
  • You are keen to provide for your families tax efficiently
  • You are facing potential IHT issues